HCMC – The fact that large numbers of corporate bonds set to fall due this year has put the debt repayment capabilities of businesses, particularly those in the real estate sector, to the test.
A report by KB Securities Vietnam JSC (KBSV) showed that banking and real estate firms accounted for the highest proportion of the corporate bonds issued, at around 60% in 2005-2022.
In 2018-2021, the value of corporate bonds issued reached nearly VND1,600,000 billion, accounting for 64% of the total in 2005-2022.
The surge in corporate bond issues was driven by the State Bank of Vietnam’s tightening of real estate loans.
In 2020, the total value of corporate bond issues was VND458.7 trillion and the figure climbed to VND775,800 billion a year later. The three-year bonds will fall due in 2023 and 2024, according to BIDV Securities JSC (BSC).
BSC noted that the debt repayment pressure would mostly affect unlisted real estate firms and small and medium-sized businesses.
In the short term, the real estate market’s growth prospects are bleak due to bank credit constraints.
In late August or early September, the State Bank of Vietnam may raise the credit growth quotas for the banking sector. The central bank targets 14% credit growth this year but many banks have almost used up their credit growth quotas.